"Personal information of certain uniformed service members, family members, and others was placed at risk for potential compromise while being processed by SAIC."

The risk of compromise was incurred because the relevant data was sent over the internet without use of any encryption. There is no special reason to believe that it was intercepted, but "the possibility cannot be ruled out".

SAIC said it was notifying 580,000 households, some with more than one person affected. Different information may have been compromised for different individuals, but the data included names, addresses, Social Security numbers, birth dates, and "limited" health information. The data was held under a health benefits programme for the uniformed services and their families.

SAIC expects to spend between $7m and $9m - approximately 0.1 per cent of its annual revenues - dealing with the consequences of the lapse, though this figure could be larger if widespread identity theft occurs. The firm has retained security giant Kroll to offer assistance to affected service people. This will include an Incident Response Centre and help for those who fall victim to identity theft as a result of the SAIC leak.

"We deeply regret this security failure and I want to extend our apologies to those affected by it," SAIC chairman and CEO Ken Dahlberg said. "The security failure is completely unacceptable and occurred as a result of clear violations of SAIC's strong internal IT security policies. In this instance, we did not live up to the high level of performance that our customers have learned to expect and demand from us. We let down our customers and the service members whom we support. For this, we are very sorry."

Interestingly, the Associated Press reports that SAIC first became aware of the leak after being notified by US Air Force personnel in Europe that they had detected sensitive information being transmitted in clear across the net.

The company says it has "placed a number of employees on administrative leave" pending the outcome of investigations. ®